Question

Whispering Winds Corp. had a $300 credit balance in Allowance for Doubtful Accounts at December 31, 2022, before the current year's provision for uncollectible accounts. An aging of the accounts receivable revealed the following:

				Estimated Percentage Uncollectible
Current Accounts		$100,000		1	%
1–30 days past due		15,000		4	%
31–60 days past due		11,000		6	%
61–90 days past due		7,900		19	%
Over 90 days past due		9,900		34	%
Total Accounts Receivable		$143,800

Prepare the adjusting entry on December 31, 2022, to recognize bad debts expense. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
Enter an account title for the adjusting entry	Enter a debit amount	Enter a credit amount
Enter an account title for the adjusting entry	Enter a debit amount	Enter a credit amount

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Assume the same facts as above except that the Allowance for Doubtful Accounts account had a $300 debit balance before the current year's provision for uncollectible accounts. Prepare the adjusting entry for the current year's provision for uncollectible accounts. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
Enter an account title to record the adjustment of Allowances for Doubtful Accounts	Enter a debit amount	Enter a credit amount
Enter an account title to record the adjustment of Allowances for Doubtful Accounts	Enter a debit amount	Enter a credit amount

Answer 1

					Estimated	Estimated
	Current Accounts			Amounts	percentage	bad debts
				a.	b.	c=a*b
	1----30 days past due			100,000	1%	1000
	31---60 days past due			15,000	4%	600
	61---90 days past due			11,000	6%	660
	over 90 days past due			7,900	19%	1501
	total accounts receivable			9,900	34%	3366
	total estimated bad debts			143,800		7127
a)	Journal entry
	Account titles & Explanations				Debit	Credit
	Bad debts expense				6827
	Allowance for Doubtful accounts					6,827
	(7127-300)
b)
	Bad debts expense				7427
	Allowance for Doubtful accounts					7,427
	(7127+300)